Is it too late to sea change to the Surf Coast?

The Surf Coast’s property market has slowed this year, but not as much as one might think.

At one point Melburnians were buying holiday homes sight unseen to escape city lockdowns, but since the capital reopened there has still been a trickle of sea-changers making the move.

Sea-changers are trickling into Torquay.Credit: Jason South

Surf Coast house values soared 43 per cent from March 2020 to their peak in May this year, CoreLogic figures show. They have since fallen 8.4 per cent to a median $1.41 million.

Surf Coast unit values gained 53.7 per cent in the boom and then fell 5.3 per cent to a median of about $981,000.

The drop is comparable to Melbourne’s overall property market, down 7.1 per cent from its high, although Melbourne’s boom was not as extreme.

And the Surf Coast has so far held up better than sea change destinations such as Byron Bay that are less convenient for workers returning to their CBD offices. Byron house values have plunged 21.9 per cent from their peak.

Demographer Simon Kuestenmacher said the end of lockdowns would remove some demand for sea change destinations, but not that much.

As the Millennial generation has children, they will move to wherever family-sized homes are available - which, if they are knowledge workers, can mean lifestyle locations such as the Surf Coast, he said.

“Remote work will be part of the working life, for sure, forever. It’s too good of an offer, and it’s something the workers will demand,” he said, but added the model would be hybrid.

“If you only go to the office once or twice a week, you are willing to commute longer.”

Hayden Real Estate Torquay director Bryan Hayden said the local market has held up “extraordinarily well” overall, although there are some pockets that are more difficult to sell in than others.

“The middle market is still quite strong,” he said. “The peripheral market around the outskirts of the Surf Coast towns are finding it a little bit more difficult to sell.”

Properties are often taking one to two months to sell, compared to the days of ultra-low interest rates when homes did not stay on the market for more than one or two weeks, he said.

He said many buyers are based in Melbourne, Geelong or other regional cities, already own property on the coast and are trading up or down.

Torquay offers a relaxed lifestyle.Credit: Paul Jeffers

“Traditionally what happens is that they buy a house for holiday purposes, or an apartment, and experience the lifestyle, and ultimately repurchase a bigger property and transfer their principal place of residence.”

One Agency Surf Coast director Shaun O’Callaghan said the number of active buyers has fallen as interest rates rose, and potential purchasers now are cautious.

Instead of four to five buyers competing per home, now it might be only two.

“Buyers are either changing their plans or they’re downgrading what they choose to spend or invest in a property,” he said. “Pricing has settled down, the intense competition has backed off.”

McCartney Real Estate director Tim Carson said his buyers are coming from Melbourne, Geelong, regional centres or farms, and the majority are buying homes to live in rather than holiday properties.

Buyers now have more time to look at four or five properties – whereas during lockdown once a home was listed as many as 10 buyers might be interested.

Lifestyle properties and homes in old Torquay or Jan Juc are holding their value better than the newer estates, he said.

“The interest rates probably don’t affect those markets as much as what the first-home buyers and the new families are probably experiencing,” he said. “We’ve seen the investment market certainly slow down purely because rents aren’t covering repayments as much since interest rates have gone up.”

Torquay local Paul Kenelley made the sea change from Melbourne for the lifestyle about eight years ago.

Paul Kenelley with daughter Romi and dog Kobe. They have moved into a new home in Torquay.Credit: Jason South

The carpentry teacher loves the area so much that when it came time to sell and buy a larger home for his growing family, they decided to move just around the corner.

“The community’s great, the beach is beautiful, transport is really extremely accessible,” he said.

“We probably bought at the back end of that really heated, competitive market - it wasn’t breakneck speed, there were definitely a couple of people that we were contending against for the property we bought.”

Paul Kenelley and daughter Romi moved just around the corner.Credit: Jason South

His former home is now for sale at 2 Fatimah Court through Hayden Real Estate, and although he felt interest rate rises had taken the heat out of the market he is confident about securing a sale.

“Get down here - it’s a great place to live,” he said.